Poultry breeders accuse big firms of unfair practices

JAKARTA (JP): Small-scale poultry breeders accused major poultry companies on Wednesday of engaging in unfair business practices, including price-fixing and holding a monopoly.

M. Alie Aboebakar, chairman of the Indonesian Association of Poultry Breeders (PPUI), which groups the country's small-scale breeders, accused the big companies of violating Law No. 5/1999 on monopolies and unfair business practices.

These large companies must be punished in accordance with the law, Alie said following a hearing with the Business Competition Supervisory Commission (KPPU).

"Their complete domination of the industry has made small- scale poultry breeders too dependent on them for supplies of day- old-chicks (DOC), poultry feed and other things needed by the breeders, including medicine and experts," Alie said.

This dependency makes the small-scale breeders vulnerable to the unfair business practices of the major players in the market, Alie added.

He said there were five large firms that controlled the country's poultry industry from upstream to downstream, with businesses ranging from poultry farming, feed production, poultry shops and butcher shops.

He identified the five firms as PT Japfa Comfeed, PT Charoen Pokphan Indonesia, PT Leong Hap, PT Wonokoyo Rojokoyo and PT Sierad Produce.

Alie accused these firms of forcing small breeders, through partnership contracts, to purchase all of their supplies from them and sell their products to them.

The law on monopolies and unfair business practice was passed two years ago. The 11-member KPPU was established to maintain a fair playing field for all businesses and to prevent monopolies, in accordance with the law.

After meeting with the PPUI, the commission held a hearing with several large poultry companies to discuss PPUI's charges.

Charoen Pokphan spokesman Soeparman S. said during the hearing the allegations made by PPUI were not supported by strong and reliable data.

"Our selling price is always determined by production costs and the purchasing power of the public. There is no ground to say we set the price beforehand," Soeparman said in dismissing the price-fixing charge.

As to the obligation of small-scale poultry breeders to purchase their supplies and sell their products to the larger firms, Soeparman said the scheme was meant to protect the breeders from "uncertainties in market prices".

Charoen Pokphan produces about 240 million DOCs per year, accounting for about 25 percent of the country's total production of 960 million DOCs per year.

KPPU chairman Bambang P. Adiwiyoto said the commission was still gathering information from all parties related to the case.

"Information is very crucial in allowing us to make a decision that is fair to all parties," he said. (03)